Why Is XRP Dropping? ETF Outflows, Fed Pressure & What’s Next

XRP’s October correction is real, but so is its latest bounce. The factors below are contributing pressures, not proven causes.

Quick Answer: XRP fell approximately 10.7% between the October 1 and October 20 daily closes as spot XRP ETFs recorded their first weekly outflow in 13 weeks and investors weighed tighter Federal Reserve policy. A rebound on October 21 eased the pressure, but XRP remained below its early-October price.

Why Is XRP Dropping in October 2026?

Market snapshot: October 22, 2026, 04:00 UTC (11:00 ICT). Using MEXC’s historical daily prices, XRP closed at approximately $1.494 on October 1 and $1.335 on October 20, a decline of 10.7%. It then recovered to approximately $1.383 at the October 21 close, gaining 3.6% in one day but remaining 7.4% below its October 1 close.

These comparisons use completed daily closing prices, not intraday lows or a live October 22 quotation.

Bitcoin, by contrast, fell approximately 2% between October 1 and October 20. That gap points to additional pressure on XRP beyond the broader market. Three areas help explain it: fading ETF demand, rising Fed rate expectations and weaker trading momentum.

Are XRP ETF Outflows Driving the Price Decline?

XRP ETFs End Their 13-Week Inflow Streak

According to SoSoValue, spot XRP ETFs recorded $1.84 million in net outflows for October 12–16, ending 13 straight weeks of inflows. A $2.47 million redemption from Canary Capital’s XRPC on October 16 pushed the week into negative territory.

The broken streak matters more for sentiment than for its immediate market impact. Cumulative net inflows remained near $1.8 billion as of October 16, and reported flows were flat on both October 19 and 20.

Why ETF Outflows Do Not Tell the Whole Story

ETF redemptions can contribute to XRP selling, depending on how funds process withdrawals and manage their underlying holdings. However, $1.84 million represents only about 0.1% of approximately $1.5 billion in ETF net assets. It does not establish that ETF selling caused XRP’s broader decline.

ETF net assets also fell substantially during the correction, primarily because XRP’s lower market price reduced the value of existing holdings. That decline should not be confused with equivalent investor withdrawals.

The clearer warning is slowing demand. An October 20 report showed just $10.25 million in net inflows month-to-date through October 16, compared with $121.4 million for September. October’s figure was an interim snapshot, not a final monthly result.

How Is Federal Reserve Policy Putting Pressure on XRP?

Inflation and Interest Rate Expectations

U.S. consumer prices rose 3.7% year over year in September, up from 3.4% in August, according to the Bureau of Labor Statistics. The Federal Reserve raised rates by 25 basis points on September 16, its first hike since 2023, lifting the target range to 3.75%–4.00%.

Higher expected rates can push Treasury yields upward, increasing the returns available from lower-risk assets. The Fed does not set XRP’s price, but tighter financial conditions reduce appetite for risky assets, and volatile altcoins can be particularly sensitive.

Why the October Fed Meeting Matters

The FOMC meets October 27–28, with its decision and Chair Kevin Warsh’s press conference scheduled for October 28.

As of October 21, markets assigned approximately an 85% probability to unchanged rates, according to Crypto Finance analysis cited by FXStreet. Expectations for a possible December hike remained elevated, but another increase was not certain.

The guidance may therefore matter as much as the immediate decision. A firm signal toward further tightening could weigh on crypto, while a softer tone might ease pressure.

Read more: Bitcoin and the Fed: Why This FOMC Meeting Could Trigger a Liquidity Trap Instead of a Sell-Off

What Other Factors Are Weighing on XRP?

Profit-Taking and Broader Crypto Market Weakness

XRP rallied through parts of the third quarter, creating room for profit-taking when momentum faded. Caution also affected cryptocurrency funds broadly: Bitcoin, Ethereum, Solana and XRP ETFs recorded $575.91 million in combined net outflows during the week ending October 16, according to CryptoSlate.

To distinguish XRP-specific selling from a market-wide correction, see MEXC Learn’s guide to the four reasons XRP falls.

Derivatives Positioning and Trading Activity

Perpetual futures open interest rose to about 2.21 billion XRP on October 20 while XRP traded near $1.30, according to FXStreet. Rising open interest means more outstanding contracts, not necessarily more short positions. Both bullish and bearish positions can contribute.

Funding rates turned slightly positive around October 19, indicating that long positions generally paid shorts. This suggests a shift in positioning but does not independently confirm a bullish reversal.

Likewise, a 72.3% one-day decline in XRP Ledger payment volume on October 17 measured transfers between network accounts, not spot exchange trading volume. It cannot establish selling pressure on its own.

XRP Price Analysis: Important Levels to Watch

The first area to monitor is $1.30, which gave way in mid-October before being reclaimed during the rebound. Below it, XRP tested approximately 1.25–1.26 on October 18, according to historical daily price data.

On the upside, 1.37–1.40 remains an important resistance zone, with $1.50 above. TipRanks’ October 21 daily technical readings placed XRP’s 20-day and 50-day exponential moving averages near $1.37 and $1.38, respectively.

Momentum remains mixed, and RSI readings vary with the chart timeframe and observation time. A single reading should not be treated as definitive evidence of a reversal.

A daily close above $1.40 on rising spot volume would be a potential recovery signal, especially if XRP subsequently holds that level. It would not guarantee a sustained trend reversal. Until stronger confirmation emerges, the rebound remains vulnerable to renewed selling.

What’s Next for XRP? Three Possible Scenarios

These are conditional paths, not forecasts. The October 28 Fed decision and subsequent weekly ETF flow reports could provide more evidence about XRP’s direction.

Repeated ETF outflows while XRP stays below $1.40 could reinforce concerns about weakening demand. However, another $1.84 million outflow or two positive ETF weeks would not, by itself, confirm a lasting market trend.

These price levels are illustrative reference points rather than guaranteed targets.

Read more: XRP Outlook 2026: ETF Flows and Price Scenarios

What Should Investors Monitor Next?

Four indicators are worth monitoring over the next two weeks.

No single indicator is conclusive. ETF flows, price action and broader market conditions should be considered together.

XRP’s October Drop: The Bottom Line

XRP’s October weakness reflects softer ETF demand, restrictive Fed policy and fading trading momentum. No single factor explains the decline. The October 28 Fed decision, subsequent ETF flows and XRP’s reaction around $1.25 and $1.40 are the main developments to watch.

Trade XRP on MEXC spot markets or explore XRP perpetual futures. Leveraged futures involve substantial risk, including the possibility of liquidation.

Frequently Asked Questions About XRP Dropping

Are XRP ETF outflows a sign of more selling ahead?

Not necessarily. One week of modest outflows is less concerning than sustained withdrawals across multiple funds.

Could the next Fed decision help XRP recover?

Yes, a less restrictive Fed stance could lift sentiment, but an XRP recovery is not guaranteed.

Will XRP continue dropping in 2026?

Possibly. Weak ETF demand and tight financial conditions could push XRP lower, while stronger inflows and spot demand could support a rebound.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Please conduct your own research (DYOR) and assess your risk tolerance before trading. MEXC does not accept liability for any investment decisions made based on the information provided herein.